Rand heads back towards R15 to the dollar

The rand fell sharply again at lunchtime on Wednesday, suggesting an element of foreign selling of local stocks.

The local currency tumbled as much as 3% against the dollar, diverging completely from the lira, which fared stronger on the day.

The sell-off in the rand coincided with the sharp drop in the value of industrial heavyweight Naspers, and mining stocks on the JSE.

The local currency also reeled from a relatively strong dollar, which, in turn, hurt commodity prices such as platinum that fell to its lowest point since the 2008 financial crisis. The price of platinum, which is used to curb harmful emissions in vehicles, as well as used in jewellery manufacture, fell 2.54% to $780.94 an ounce, boding ill for struggling local platinum companies.

“It is interesting how the rand is performing today. We had the Reserve Bank governor painting a grim assessment of the economy, implying growth will be much less than initially anticipated,” ETM Analytics market analyst Halen Bothma said.

The rand has been on a roller-coaster ride since at least Friday, when concerns over the Turkish economic crisis rattled global markets.

Earlier in the week, Bank deputy governor Daniel Mminele told Bloomberg news that the Bank would wait for evidence of inflationary pressures before deciding on interest rates. His comments came after the rand fell by the most in a decade, crossing R15 to the dollar in two years in the early hours of Monday morning, raising inflation concerns.

At 12.44pm, the rand was at R14.6484 to the dollar, from R14.2446; at R16.5785 to the euro from R16.1583; and at R18.6138 to the pound from R18.1157.